Charles Schwab fourth-quarter net down on year-earlier gain

DonnaKardos

Charles Schwab Corp.
SCHW, -2.11%
reported a 34% drop in fourth-quarter net income amid a year-earlier gain, with revenue rising, and the company saw high trading volume during the turbulent period.

The San Francisco brokerage posted net income of $308 million, or 26 cents a share, down from $467 million, or 37 cents a share, a year earlier.

The latest quarter's results include a $3 million gain from the sale of U.S. Trust, which was completed July 1, in income from discontinued operations. Year-earlier results included a $205 million tax benefit related to the then-pending sale of U.S. Trust.

Revenue rose 23% to $1.35 billion.

The mean estimate of analysts polled by Thomson Financial were for earnings of 27 cents a share on $1.32 billion in revenue.

The company saw a 35% return on equity, an important measure of profitability, down from 39%. Pretax profit margin was 39.1%, versus 33.9%.

Total assets increased 17% to $1.4 trillion in 2007, with net new assets rising 92% to $160 billion. Brokerage-account growth climbed 24% in 2007 to 809,000, while total accounts increased 5% to 7 million as of Dec. 31.

Chairman and Chief Executive Charles Schwab said the results reflect the company's focus on earning clients' loyalty and helping them achieve better financial outcomes, while continuing to improve the company's own financial performance.

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